Land Prices Skyrocket

[K2]

"....land prices in Phuket had increased 157.7% due to sustained growth in the tourism, real estate and retail sectors. The increases were the highest recorded among Thailand’s 76 provinces."

Full story here ..

Phuket Gazette - online English newspaper for Phuket, Thailand, with daily news, classified ads, yellow pages, business listings, upcoming events, event calendar, phuket events

Some good news for once

[Dodger]

Not so good if you are looking to buy a piece of land.

[dennisinkamala]

Thought the market was flat at the moment with political uncertainty.

I dont get it!!

[LivinLOS]

Thats a 4 year run up and government numbers..

I would say its been worse than flat for the last 12 months or more.. It matters not what land is valued at if theres no one buying at that 'value'.

[wazza]

Certainly climbing rapidly here in kathu. had my eye on a block down the road and made enquirys and its price has doubled. Was looking at putting a block of bungalows on it but is far too expensive now

[ATMwalking]

Originally Posted by LivinLOS

Thats a 4 year run up and government numbers..

I would say its been worse than flat for the last 12 months or more.. It matters not what land is valued at if theres no one buying at that 'value'.

Agree on the numbers.

Far as I can tell, thais are still actively trading. The smarter ones know if the government stuff becomes more favorable, then there will be a pop in values. They see flat prices over the past year as a deal. So they are just banking it.

[Denver]

Good! As far as I am concerned there are too many unscrupulous overseas 'developers' gouging great swaths of jungle for profit as it is.

The island is turning into a bloody building site IMHO and I have seen it in too many 'places of natural beauty' to have to say that if the land was ten times as much it would be too little.

Pricing out the locals who can't purchase anything they put on there.

I know the locals are going to sell, I know there are people out there with the money etc..............It's just a shame as far as I am concerned.

Condoms, thats the answer...................Condoms.

[Baz]

Quote

It matters not what land is valued at if theres no one buying at that 'value'.

It's only the thais who are trying to sell at those stupid prices, they don't think, no one will buy if can't make a profit.

Loads of Shop & Apartment units going up in kathu.

One block of 10 shop & apartments finished one year ago only 1 sold so 9 years to sell the rest. Lot of money for property left ideal for along time.

[Geir]

Its still some good value projects going on around phuket town with 2 bedroom townhouses starting at 890k bath. Small garden and parking-space for 1 car.......Not bad if you ask me.
Agree that the tourist-areas and even Kathu are way overpriced

Geir

[nelsonone]

it would seem that land vs house/condo prices are way out of trends kilter if those figures are correct

[Sparkle]

so hard to get real market data here......was speaking to a thai friend who had recently purchased a small block up in the north east of the island...not a 'prime' block. he said over dinner that he paid $6m/rai....which he didn't! he said there is no value in saying that you got a bargain....you always say you paid the 'going rate' which apparently at present is $6m there, no matter what you paid. and no matter what the quality of the site.

Why?

because you don't want to bring the price down.....the whole market (he said) is based on the most recent rumour of who is ASKING what for their land. Apparently it is rarely based on an actual sale price. So asking prices will jump significantly in one street because they heard that some else in another street is asking a higher price.....not getting it mind you...just asking it.....and so the wheel turns. and everyone perpetuates it because they say the sale they got was the mythical figure that everyone is now asking.....even if it was 1/4 of it.

another guy has told me 3 different prices that he paid for his land 2 years ago.....each time he told me it went up to match the current going/asking rate.

so all in all it's hard to know for sure what's going on.

but i guess if the government has put out figures they must be correct

[ATMwalking]

@sparkle

you make good points.

If you step back, most of the property stuff here is complete nonsense top-to-bottom. Of course there is some real value to property in Phuket, but realistically pricing it is a whole other thing.

[Nicke]

I agree with ATM, good points Sparkle. Buying land here is not easy, including the factors you mention.

Originally Posted by Sparkle

so hard to get real market data here......was speaking to a thai friend who had recently purchased a small block up in the north east of the island...not a 'prime' block. he said over dinner that he paid $6m/rai....which he didn't! he said there is no value in saying that you got a bargain....you always say you paid the 'going rate' which apparently at present is $6m there, no matter what you paid. and no matter what the quality of the site.

Why?

because you don't want to bring the price down.....the whole market (he said) is based on the most recent rumour of who is ASKING what for their land. Apparently it is rarely based on an actual sale price. So asking prices will jump significantly in one street because they heard that some else in another street is asking a higher price.....not getting it mind you...just asking it.....and so the wheel turns. and everyone perpetuates it because they say the sale they got was the mythical figure that everyone is now asking.....even if it was 1/4 of it.

another guy has told me 3 different prices that he paid for his land 2 years ago.....each time he told me it went up to match the current going/asking rate.

so all in all it's hard to know for sure what's going on.

but i guess if the government has put out figures they must be correct

[Benjy]

I'd say that land prices have doubled in the last 3 years, I know lots of people who have bought land recently and have paid the going rate - When you can build a luxury house for 20,000 baht a square metre, plop a 400 square metre house down and sell it for 30 million baht+ depending on the view etc... its quite easy to see why land has got dearer.

I've known people who have been sitting it out for 5-6 years waiting for land to go down in value, back then a friend of mine bought 8 rai on the east of the island for 200,000 baht a rai - he sold it for over a million per rai recently.

Personally we are looking for a tiny piece of land to buy so we can build a shophouse on the road from Heroine's monument to Mission Hills. 8x20m plot I saw recently was 750,000 baht, with only 3 of the 10 left. It was very tempting.

[ATMwalking]

@Benjy

I totally agree with your second two points. Naked land and commercial property. Those both increase in value and are fairly easy to move.

New property was moving well until recently. I've always had my doubts about the resale market. Not so much on the lower end, but especially in the upper-end. If I'm willing to plop down ~1m USD, why buy used? Just build your own custom villa or pick from one of the many projects. There are of course some exceptions for exceptional views in prime areas (like sea view in Surin).

[stiffyStiff]

GEIR SAID
Its still some good value projects going on around phuket town with 2 bedroom townhouses starting at 890k bath. Small garden and parking-space for 1 car..
HOW TO GET MORE INFO ??

[Dodger]

Ask Geir maybe???

[K2]

Further evidence of resilience in land (as opposed to property) prices ...

From the Gazette



Monday, December 31, 2007

Phuket land prices skyrocket

PHUKET: The tax man will have some jolly years ahead as the government-assessed land prices for many locations in Phuket are seeing triple-digit rates of growth.

On Thursday, the Phuket Provincial Treasury Office (PPTO) confirmed details of the new land values, which were leaked to a Prachachart Turakij reporter in October (click here for full story).

Phuket Gazette - online English newspaper for Phuket, Thailand, with daily news, classified ads, yellow pages, business listings, upcoming events, event calendar, phuket events

Land appraisals are done every four years to set benchmark prices for land, which are used for reference by the PPTO when levying taxes on property transactions. The latest figures will take effect January 1, 2008, through to the end of 2011.

Assessed land prices in Thalang’s Srisoonthorn subdistrict increased by 284.68% while Cherng Talay and Paklok saw prices rise by 202.18% and 200.16% respectively.

The highest land price increase as a percentage for plots along a main road was 535%, for land on the Baan Don-Layan road in Cherng Talay. Prices for plots along that road rose from 2,000 baht per square wah (four square meters) to 12,700 baht, due to the large number of high-end developments in the area.

Land plots along Baan Layan-Baan Sakoo road in Sakoo also saw a dramatic price rise – an increase of 400% – from 2,000 baht to 10,000 baht per square wah, while land plots along Ton Sai Rd in Thepkrasattri rose 324%, from 2,500 baht to 10,600 baht per square wah.

Patong’s Thaweewong Rd, commonly called “the beach road”, reigns supreme as the priciest land in Phuket, with a new assessed price of 94,000 baht per square wah, up 113% from 40,000 baht in the last valuation.

For seaside property, Rawai had the highest rate rise, a whopping 592.31%, from 650 baht to 4,500 baht per square wah. Pa Khlok land values rose by 500%, from 500 baht to 3,000 baht per square wah.

Among housing estate properties, Baan Suan Yoo Charoen in Cherng Talay increased the most, by 643.33%, from 3,000 baht to 22,300 baht per square wah, followed by Moo Baan Roong Rawee and Baan Nai Yang Resort in Sakoo, which rose 500% and 566.67%, from 3,000 baht to 18,000 baht and 20,000 baht per square wah, respectively.

Baan Suan Neramit 2 in Kathu had the highest assessed land value among housing estates, at 33,200 baht per square wah, up from its previous assessed price of 10,000 baht.

Moo Baan Sun Palm Village in Chalong had the second-highest price, at 32,200 baht per square wah, rising from 8,000 baht, while Moo Baan Rom Mai Chai Lay in Rassada was assessed at 30,000 baht, up from 10,000 baht per square wah.

Dr Somsak Muneepeerakul, president of the Real Estate Brokers Association, said that the property market will continue to grow in Phuket, despite the tsunami and other challenges.

“The property business in Thailand in the next year will grow about 15% to 20% because we will have a new government and it will give investors confidence,” said Dr Somsak. “In the opinion of property people like me, we don’t want prices to rise too fast – we want it to grow more moderately in order to avoid a painful crash.”

Gazette property columnist Bill Barnett, of C9 Hotelworks, said, “Certainly, Phuket land prices have continued to move up despite the Foreign Business Act, political landscape and other issues.

“The government assessments are now coming in line with the actual market prices… Ultimately, taxation will benefit, which should provide the government with money to improve the island’s sagging infrastructure and modernize key elements such as highways, and overall hopefully invest something back into Phuket’s future.

“It’s not realistic to continue to take from the growing land boom without putting something back into the local municipalities,” he said.

Phuket Real Estate Club president Phummisak Hongsyok said that property buyers should not worry about the new Land Office figures. “I don’t think the new estimated prices will make [actual] land prices increase too much, especially in Patong and Phuket City, where the estimated price is not very different from market prices,” he said.

“People buying property in Phuket don’t have to worry because [prices] will not be much different from what they have been over the past three years,” he said.

[ATMwalking]

Originally Posted by K2

“People buying property in Phuket don’t have to worry because [prices] will not be much different from what they have been over the past three years,” he said.

Isn't this another way of saying the property market is flat? Not great for owners.